Sunday, 26 June 2016

Brexit and the case for Scottish independence

OK, let’s all just calm down. Here are some things that we know as fact

The UK democratically decided to leave the EU. Lots of us don’t like that, lots of us don’t like the way that vote was achieved - but that’s democracy and there’s no point bitching about it now*

* it's pointless but tempting; I might not always resist that temptation

It was a UK-wide vote for Leave within which Scotland, Northern Ireland and London voted in favour of Remain

Something has fundamentally changed since Scotland voted to remain in the UK. Many of us voted partly on the basis that we considered the best end-game was Scotland being in the UK in the EU; for us it was rational to vote No because only a No vote made that outcome possible. People struggle to intuitively understand probabilities - but right up until midnight last Thursday that still seemed the most likely outcome

The SNP manifesto included an explicit option to seek another independence referendum"if there is a significant and material change in the circumstances that prevailed in 2014, such as Scotland being taken out of the EU against our will"

So: in these circumstances it is completely reasonable that the SNP should explore ways of securing a separate EU deal for Scotland, up to and including revisiting the question of Scottish independence.

It's important to consider that some interesting options might be available for Scotland without becoming independent. We will hear much in the coming months about the Greenland and Faroe Island precedents, but frankly these are not overly relevant - the bigger point is that we are in uncharted territory for the EU so precedents are of limited value. At this stage we simply don't know what might be negotiable and it makes sense to explore all options (as Nicola Sturgeon is quite sensibly suggesting).

We live in extraordinary times. As I write this the Tories have a lame duck leader, the chancellor of the exchequer has gone to ground and the Labour party is in melt-down. Meanwhile nobody knows what Brexit is actually going to mean because negotiations with the EU haven't even started yet.

If ever there was a time to pause and reflect and just wait to see how the dust settles, it is surely now.

So let me just park a few inconclusive observations here.

One school of thought I'm hearing on Twitter can be characterised as follows:

"The UK had the courage to leave the EU, why shouldn't Scotland have the courage to leave the UK?"

"The economic case didn't stop the UK voting to leave the EU so why should it stop Scotland leaving the UK?"

This is an understandable emotional reaction, but the economic cost for Scotland leaving the UK - if you prefer, the courage required - is an order of magnitude greater than that for the UK leaving the EU.

Scotland currently receives an effective fiscal transfer from the rest of the UK of over £9bn pa (see chokkablogs passim and even the SNP themselves during the fiscal framework negotiations). If we scale that in UK terms it would be the equivalent to the UK receiving £90bn pa or £1.7 billion a week.

If you'd plastered "Vote Leave to lose £1.7bn a week" on the side of a big red bus you might have seen a different EUref result. The economic cases are not comparable1.

A more rationally structured question might be

"Yes it may cost us to leave the UK, but might that be a cost we're willing to pay now if it keeps us in the EU and/or democratically uncouples us from a mass of population with whom we simply don't seem to agree anymore?"

In the immediate aftermath of the EUref result Sturgeon seemed to be framing another indyref as a chance for Scots to vote to "stay in the EU" as much as "leave the UK" - but we don't yet know whether Scotland staying in the EU is even an option.

Would member states who have independence movements within their own countries want to create this precedent?

Scotland doesn't have its own stable currency and our stand-alone deficit (as % of GDP) would be larger than any existing EU country - so even if the EU made a remain option available for Scotland, it is likely to come with some pretty significant conditions. Are we ready and willing to join the Euro? Would we be willing to slash public spending by over 15% if the EU made this a condition of remaining?

Of course it's also the case that it's not clear what remaining in the UK looks like now. Will the fiscal framework that currently guarantees us that £9bn fiscal transfer survive the repercussions of Brexit?

If we voted to become independent now there can be little doubt that borders would be involved; borders between Scotland and the market where 64% of our exports go.

Currency remains a huge question - what EU deal could we secure if we planned to continue to use sterling? Do we really want to adopt the Euro if one of the implications of Brexit might be the meltdown of the Eurozone - would we be voting to jump out of the frying pan and into the fire?

I gave up fighting the label of being a "Unionist blogger" a while ago, but my position has always been that defending the Union was a position I arrived at, not one from where I started. So until we know what options are on the table and - is it too much to hope for? - we've heard them honestly presented, I have no idea what my view on a possible indyref2 would be.

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1. It's also worth observing that Scottish trade with the UK represents about 64% of our exports (the UK's trade with the EU represents about 45% of the UK's exports) whereas Scotland's trade with the EU represents only 15% of Scotland's exports. So the UK is four times as important to Scotland as an export market than the EU

I think the borders question is one of the clincher issues here, and it's one we simply don't know anything about at this point.

The border posts argument in indyref1 was always a bit of a sideshow. It was possible that there might be border controls between England and Scotland, but only if this, that and the other happened, and even then it wouldn't affect freedom of movement rights between the two sides.

This can no longer be assumed. There is serious discussion of border controls and customs checks on the Irish border, and if freedom of movement goes in Brexit negotiations, that surely cannot not include the Irish. Even though the Irish government have done everything in their power to keep the border open.

In the worst case scenario, in order to regain their right to work in Paris, Munich and Madrid, Scots would have to give up their collective right to work in London, Manchester and Belfast. Whenever they crossed the border, Scottish citizens visiting family in rUK would have to show their paperwork and basically convince the border guard to let them in, just as Canadians and Australians do today. The Scottish government would rail against it, but if the Irish government can't prevent it it's difficult to believe that the Scottish government will be more successful.

And if we doubt the value of these rights, it's worth remembering that one of the main drivers that forced Scotland to negotiate the union in the first place was the English Alien Act 1705, which proposed to abolish similar rights held at the time.

"Scotland currently receives an effective fiscal transfer from the rest of the UK of over £9bn pa"

These fiscal transfers are as a result of Westminster borrowing from the international markets on our behalf, supposedly for services which are provided by central government on reserved matters which are administered from various locations based in London and the South East of England. Therein lies the fundamental problem as very little of the money borrowed "supposedly" on our behalf makes it North of the border, but these subsidies (because that's what you really mean) have to be paid for by Scotland which might be the reason our "fiscal transfer" debt obligations are itemised in GERS. Is there a reason why when you bang on about the bungs we "supposedly" get you forget to mention this important detail?

Do you receive an "effective fiscal transfer" from your mortgage lender for your wee bit of Scotland that you don't have to pay back? No? Neither does Scotland Whatever the size of borrowing/deficit) so you might want to make that a bit clearer instead of making it look like we are subsidised by the UK.

"Would member states who have independence movements within their own countries want to create this precedent?"

In reality, Sturgeon just has to convince Germany that Scottish acession is a good idea. The Germans call the shots in the EU, all else is mere window dressing. That said, you have to be careful what you wish for because Westminster austerity ain't nothing compared to German austerity. Just ask the Greeks about that.

All this assumes that the UK government actually invokes Article 50, which, who knows. There is already a concerted effort underway in the media to invalidate the results of the referendum because the Leave voters were too old, too uneducated, already regretting their votes, etc. The dreaded Brexit may not materialize after all.

“So: in these circumstances it is completely reasonable that the SNP should explore ways of securing a separate EU deal for Scotland”

I'm really not sure that's the case. Yes, I voted Leave, so in one sense I would say that, but the fact is that the majority in Scotland voted for the UK to remain in the EU, not Scotland. I don't deny that it's possible that this is what they want, but it can't simply be inferred from this result. It's true that many voted “No” in 2014 partly because of UK membership, but many others - myself included - did so, at least in part, because it presented the best chance of getting out.

Would it be fair to assume that Dundee and Glasgow want the status of independent city states because they voted “Yes” in 2014? I don't think so.

It's certainly true that there are options that could be explored short of “independence” (one friend suggested that England and Wales could leave the UK while Scotland, Northern Ireland, London and Gibraltar remained part of the existing Member State :) ), but again, I don't think that this vote, in itself, provides a mandate for that.

A third referendum (God help us) would clear this up, and it is reasonable to seek one. But I know that if I were a nationalist I wouldn't be at all confident of winning it.

KevinI am very upset with the eu result and would consider suporting independence provided ( and it's a very big IF) that the following are made clear Currency - Euro?Our EU contribution?Fiscal framework and consequencesAn Honest discussion on the consequences of leaving what it will cost and then we can decide if we want to payI am waiting to see how much more we will have to pay and the decide if I suport that

Random thoughts on this: I think the key issue here is that there were basically two broad pragmatic arguments about independence in Scotland in 2014 - a political argument and an economic argument.

For me, the economic case was clearly inadequate and that's still largely true now. Voting for independence to become richer isn't likely to prove achievable. Arguably Brexit will damage the rest of the UK economy enough that it might have made some dent in the economic calculation here, but not enough to compensate for the kind of fiscal problems in the last GERS report and the other issues like the currency.

But the political argument is now radically different. In 2014 I concluded, like a lot of people, that if UK decisions will continue to affect us we benefit from having representation in them. Just the same argument applies in the EU, but now we no longer have the possibility to be represented at all three levels (Scottish, UK and European) we can only pick two. I think on balance, given the EU deals with the regulations that govern the single market (and UK regulations will likely now approximate these regulations from outside like Norway) as well as major decisions of importance to the continent, such as the response to the Eurozone and migration crises, I would genuinely on a political level rather be part of the EU than the UK.

There is of course an emotional argument as well. I'm deeply alienated by Brexit. The values of the people voting for it are utterly at odds with what I believe in and there's an argument for saying that a country on an emotional level only has purpose if you have some level of shared values. Since Friday then I'd say independence is now something I'd consider on political and emotional terms, even if I think the economic argument still isn't there.

I am personally horrified at the EU referendum result. Nicola Sturgeon now has something very big to blame Westminster for. The nervous breakdown affecting the Tories and Labour shows them in a desperately incompetent light. It is now clear there was no plan for this eventuality. Make no mistake, this going to rumble on for years and years. The claims made by Leave were Walter Mitty fantasies and to their shame, they were believed by 52% of the UK.

I agree with Eric above. Spell out the cost of independence. Don't tell me a tale about unicorns. I may choose to support it next time.

Alas, Kevin, I think you are going to have to wait a very long time until you get answers. The harsh truth is that the EU and our partner governments, hobbled as they are by their adherence to codified laws, will not hold any formal talks with the Scottish Government until such time as Scotland is an independent state. What is certain, though, is that, if we do get to that stage, Scotland will DEFINITELY have to join the Euro (and thus will, for starters, have to set up a central bank and separate currency and slash its budget deficit). There is simply no escaping this: as Britain has just proved, an opt-out from the Euro provides an exit from the EU, which none of the European integrationists want, tortured as they are by memories of Germans going around killing everybody. (This, incidentally, is why the top Eurocrats are so pissed about Britain pulling out - they are utterly terrified of German dominance, and saw London as a counterweight to Berlin - for example, the Pole Donald Tusk's hysterical warning about Brexit leading to WWIII was obviously said from the point of view of someone whose country had been devastated by Germany barely 60 years ago. It is fear that is driving them, and what has driven the EU project from the very start. Nothing more.)

It's not just that the economic argument isn't there, it's that the fiscal position has worsened considerably since 2014 and will be much worse again this year. Not only that, but Nats refuse to accept this is even the case and thus have no solutions.

While I agree that all bets are off, even if it were minded to accept an independent Scotland, how could the EU accept a country with our deficit to GDP ratio, no central bank, no currency and no plans or resources to deal with these issues?

That's before considering the very significant impact on the wider economy of a hard border, and potential tariff barriers with (by far) our biggest market.

The purely political issues are far more unpredictable but I can't imagine how actively encouraging further fissile separatist movements is in the EU's interest, particularly at this parlous moment. And individual countries like Spain have even stronger objections as we all know. I can also see the EU regarding any representations from Scotland at the moment as at best a distraction and at worst an irritant.

If these obstacles were somehow overcome, aside from continuing access to the single market what can the EU offer an independent Scotland? Nothing which could plug the yawning fiscal chasm. In fact, as alluded to above, the ECB will take a very different tack. Last year, the Treasury effectively stumped up an addition £7b without a murmur to plug this gap. For the current year, it'll probably be closer to £12b. The ECB by contrast will tell any Scottish government to get its house in order and institute eye watering tax rises and cuts in expenditure. That would be the case even if oil were to recover to 2014 levels, since even then the deficit would be deemed too high.

I appreciate that in the current febrile atmosphere, cool heads are required and that we need to see how things play out. Despite this, Kev, I find your wait and see attitude to indyref2 quite perplexing, mainly for the reasons set out above, and which you understand rather better than I do. In short, it seems to me that iScotland in the EU but out of UK is worse than iScotland and rUK both in the EU.

"That's democracy"? I'm hearing this a lot at the moment and fundamentally disagree. A result brought about by politicians and media peddling blatant untruths, exploiting the fears of angry gullible people, stoking xenophobia, and making promises without the remotest intent to keep them is NOT democratic. Nor is a referendum that asks the public to vote without a full, clear, balanced and objective summary of the two options and their potential implications. If we allow this to be regarded as democracy in action rather than the shameful political rabble-rousing and lying con-trick that it was, then we are letting down future generations even more than will this disastrous result. rocoham

The problem with your in-depth analysis has ALWAYS been based on where we are now Kev, no further investment, no further growth, just a basic status quo reflection of a country standing still.

Imagine going to a bank with your business forecast in hand and then having the bank manager reject your proposals out of hand simply because your business isn't already in place and making vast profit? Daft?...Of course it's daft, which is the very reason why I've asked you in the past to show me how Scotland's financial position would have looked had we been independent since the discovery of oil? [which I - strangely never - received an answer]

As you've said yourself 'Scotland is quite capable of being a successful independent country', Good...prove it?...Instead, you choose to become that 'bank manager', insisting that everything should be in place already before giving it your blessing.

Economics isn't only about the money, it isn't about how profitable a country should be before living there, it IS about how fair and how content an entire society is. You have focussed on a one dimensional path, and sadly missed the point of Scottish independence.

Right now, with what's happening in England, and the path that their electorate have [sadly] taken, which I must declare, I want no part of, surely you must do some soul searching and at least be honest enough to admit, 'Do I really feel comfortable asking Scotland to go along with this UK sinking ship?'

First off, massive respect to you for showing an open mind. I always had you down as a "dyed in the wool" unionist - I know you have denied this but i didn't buy it.So, please accept my apologies.The internet is groaning under the weight of folk expressing their views on Brexit & beyond. The one & only thing that we can be sure of is that we are in uncharted waters &, as is often the case, the people to be wary of are those who claim to be sure what the future holds. Many, on both sides of the independence debate have simply continued to trot out the same old propaganda, as if nothing has changed. I somehow suspect, in the end, I Won't be welcoming you aboard the SS Indyref2, but I hope to be proved wrong.

The biggest issue with regards to 'Brexit' and indyref2 is that the SNP has ignored the almost 40% of people who just voted to leave, even without a substantive Leave campaign actually being held in Scotland.

That 40% were almost half of people in places like Moray and Dumfries.

It's even estimated that 35% of her own voters at the last election voted to leave!

If Brexit negotiations go successfully over the next years, and Scotland achieves devolution of fisheries and other policies, the duplicity of Nicola's "independence in Europe" myth can be exposed.

The rUK is a far, far larger trading market for Scotland than the EU. It has also proved willing to reform, as seen by the devolution of new tax powers recently to Holyrood. The EU on the other hand, misjudged the atmosphere of the referendum, and sent DC home with nothing.

In the Scottish referendum vote of 2014 Nicola was told categorically from Brussels, that separating from the Uk meant Scotland having to leave the EU too. Her then answer was to ignore the warnings and carry on regardless with her SNPexit

Fast forward to 2016 and Brexit, Nicola is now in an uproar about a vote leaving the EU, she was prepared to except back in 2014 vote.

Hypercritical and opportunistic are two of my milder words for Nicola's current behaviour.

Hi I'm Dave from england, saw a link on fb and decided to have a gander.

I appreciate the issues in play with the Scottish referenda and end up on the unionist side of the fence, not from a sentimental perspective but logical.

Economically now it is even more uncertain with the rest of the UK voting out - which the commons must as send otherwise there will be an almighty constitutional crisis. Considering Scotland has a net gain from the UK centrally and with the other nations being the prominent trading partners, I ask the question what is to be gained for Scotland by remaining in the EU as an independent country logically - passionately our hearts will overrule so a strictly heads argument.

Hypothetically eu membership and independence is attained.

Most of your trade is outside the EU therefore tariffs will be imposed more than likely and border controls thereby restricting movement of goods reducing trade and therefore taxable income to the Scottish government as company profits would fall as would individual wages to increase the liquidity of companies.Additionally on that note consider if the UK without Scotland entered the north Atmerica free trade area as postulated by many American economists already, then a further export market will have been lost with regard to reduced tariffs.

A significant number of arguments pertain to North Sea oil being fully Scottish. It already does not serve domestic supply and so more is imported. That leaves it likely that with falling oil prices at present the UK could further negotiate independent fuel supply arrangements with Qatar for example where liquid gas comes from reducing the need for North Sea products, again stifling national income that Scotland would be heavily dependent upon.

Furthermore as these industries fade, unemployment rises, crime usually rises as a result through desperation increasing the burden on the central purse which is having reduced I come and therefore increased borrowing without even considering expenses to the EU and what proportion would return alongside adopting a currency again the majority of trade would not be conducted in, making merchant banks the true beneficiaries by taking commission in currency exchange.

The EU is a known unknown. We know it's there, it may provide stability in context but where is it going and how much Scottish sovereignty is willing to be sacrificed when that is what is sought by independence. The cost will almost certainly increase. Immigration will increase if the welfare system at present remains and the UK places stricter restrictions on migration. Current migration conditions will be lost by the imposition of schengen.

I could keep on going. I see there are major benefits to unity and the more Scotland bangs on about independence, the question will rise in England- do we want the Scots in the union as it seems they're wanting the best of all ways round.

As an Englishman I am jealous of the Scottish parliament and the passion the snp invoke as I dearly wish for an English parliament because as reflected by the EU referendum, Westminster lives in its own bubble and is completely disconnected from anywhere outside the m25.

If I were Scottish, I would be pleased for leave as it provides greater impetus to look slightly within and how to bring the issues that came the fore in the EU referendum under control and reform for equity within the union alongside a greater prospect of international trade.

Additionally there cannot be numerous calls for referenda every time something doesn't go the politicians way, that will cause ill will and despondency.

We are stronger together for out cultural differences and similarities and outside the EU, the Scots have a much greater opportunity and role in forging the success.

Considering I'm 25 I think I have a very positive outlook on the union, making the best of Brexit and enhancing sovereignty. I look forward to your thoughts.

During the last Ref, there were calls for Scots living in rUK to have a vote - these were considered, then dismissed. There are approx 800,00 Scots living in rUK, an iScot in the EU would have a major affect on them so in another referendum, surely they would have to be given a vote?

1 / If Nationalists in Scotland argue Scotland has been taken out of the EU against there will and want a second referendum and If we were to accept that argument then the whole of the UK should get a vote on Scotland leaving the UK union as then England , Wales and Northern Ireland could be removed from Union with Scotland against there will ?

2 / The more and more I read Nationalist comments online and hear Ms Sturgeon herself , the more I am starting to believe she and her Nationalist support do not have a problem with Unionism , so is it more of a problem of who they are in Union with ?

1 / If Nationalists in Scotland argue Scotland has been taken out of the EU against there will and want a second referendum and If we were to accept that argument then the whole of the UK should get a vote on Scotland leaving the UK union as then England , Wales and Northern Ireland could be removed from Union with Scotland against there will ?

2 / The more and more I read Nationalist comments online and hear Ms Sturgeon herself , the more I am starting to believe she and her Nationalist support do not have a problem with Unionism , so is it more of a problem of who they are in Union with ?

"The SNP manifesto included an explicit option to seek another independence referendum"if there is a significant and material change in the circumstances that prevailed in 2014, such as Scotland being taken out of the EU against our will"

So: in these circumstances it is completely reasonable that the SNP should explore ways of securing a separate EU deal for Scotland, up to and including revisiting the question of Scottish independence."

Kevin,you miss the whole point that the SNP manifesto included an undemocratic attempt to circumvent a democratic vote prior to that vote taking part

That is now two democratic votes that the SNP have not accepted,over 1,000,000 Scots voted remain instead of leave,these voters were instrumental in the Thursday`s resul,this is called democracy

"I'm deeply alienated by Brexit. The values of the people voting for it are utterly at odds with what I believe in and there's an argument for saying that a country on an emotional level only has purpose if you have some level of shared values." (Gordon Adam).

Oh, I agree entirely. It seems that wanting Scottish self-determination (Independence) is considered a noble aspiration but the English and Welsh wanting self-determination for themselves is considered to be both unacceptable and xenophobic.

We may share an Island, we sadly share a Treasury, but we clearly no longer share a Demos.

It's getting more likely that France may vote to leave the EU next year and Denmark, Hungary, Italy, Austria and others may also hold referendums. The EU is not fit for purpose anymore and we need to consider if this is the start of the end of the EU.

“I'm not saying remain is evidence for support for Indy; I'm saying they explicitly stated in their manifesto that they wanted the option to seek indyref2 under these specific circumstances”

I'm not saying you did. I deliberately only quoted the first part of your two points, the one about seeking a separate EU deal. Without a “yes” vote in another referendum, there is, as yet, no mandate for that. It's a fine point, but an important one.

“The biggest worry now is that Scots have a choice between two lots of nationalists”

Not at all. The Leave vote may have been partially driven by nationalistic feeling, but if nationalism's what bothers you, the UK outside a European nation-in-waiting is by far the least bad option. Don't fall into the SNP trap of conflating patriotism and love of country with political nationalism. Britain has always been strongly resistant to that dangerous idea of making all civil society defer to the Nation as expressed through the state.

The EU Colleagues may talk grandly about their disdain for nationalism, but in truth the state that they're constructing is itself more nationalist in character than many of the countries it's trying to unite. German nationalism didn't start with Hitler; it started with Bismarck. The EU is trying to do to Europe what he did with Germany.

"I'm deeply alienated by Brexit. The values of the people voting for it are utterly at odds with what I believe in and there's an argument for saying that a country on an emotional level only has purpose if you have some level of shared values."

For all the - I accept - ugly rhetoric from some parts of the campaign (on both sides) the No. 1 stated reason for voting Leave was a desire to defend our parliamentary democracy from the EU system of government. You don't share those values?

“We may share an Island, we sadly share a Treasury, but we clearly no longer share a Demos.”

On the basis of one vote? Take a look at the map on the right at the top of this article. Doesn't look quite so dramatic, does it? And didn't we just elect a Conservative opposition at Holyrood, after decades of being told that it was our implacable hatred of the nasty crypto-English Tories that separated us? Come on. I've been saying it for four days now: let's all calm down a bit.

I remember when we joined the EU we negotiated a period where the commonwealth countries could adjust as they would no longer have the same rights. So might this means we could develop far greater business with countries such as Canada, Australia, New Zealand, India, etc? This would be a larger market than the EU and also English speaking.

@Sam Duncan. That's a great map, but it's not just one vote though is it? At the last General Election Scotland returned 56 SNP out of 59 Westminster MPs.

No. 1 stated reason for voting Leave was a desire to defend our parliamentary democracy from the EU system of government.

I do indeed share those values which is why I was a passionate LEAVE supporter.

The Nation state is the largest viable unit of people that acts (and sacrifices) together for the common good. My only concern is what is in the interest of my fellows, the ones who will stand with me and my family on our journey into the future. That's England and Wales.

England and Wales share a common vision, our politics is largely the same and people from both nations recognise our common heritage and future. We share a Demos.

This cannot be said for either Scotland or Northern Ireland.

In Northern Ireland's case the "Unionists" are actually "Ulster Nationalists" whose only interest in the UK is that it is not the Republic of Ireland and that that it provides a steady stream of wealth for them to spend on themselves. Meanwhile the Nationalist side have shown themselves all too willing over the years to resort to violence against the English, (but not their "fellow Celts" in Scotland and Wales).

In Scotland's case both sides are at least largely non-violent democrats. One side thinks the best interest of Scotland is for Scotland to be independent. The other side thinks that it is in the best interest of Scotland to be both subsidised and have a larger voice on the World Stage by association with a larger neighbour. Neither side actually cares for their "fellow Britons" the English, they only care what is best for Scotland alone. Some Scottish MPs are so spiteful they will deliberately choose whichever option causes England the greatest harm.

Given the above, my only concern is how soon my nation cannot extricate itself from the other unwanted Union. The "Big Britishers" love calling people like me "Little Englanders", a term originally used for those who didn't want an Empire, they just wanted friendly relations and free trade with the rest of the World. Well, despite the sneers that's not a shameful aspiration and I have no problems with supporting it.

Incidentally, Kevin himself says above: "my position has always been that defending the Union was a position I arrived at, not one from where I started."

Or in other words, our esteemed host is not an instinctive Unionist, but rather one from rational self-interest.

This is a perfectly legitimate position to hold, but I do believe that it also provides evidence for my point of view.

For myself, I was an instinctive Unionist who was made a second-class citizen of the British State by a bigoted Devolution settlement carried out by Scottish MPs. As a result I too have arrived at a new position, and not the one from where I started.

Anonymous (26 June 12:15) is right. The evidence from yesterday suggests Donald Tusk will not talk with bits of current EU members, such as Scotland, because it would offer succour to other secessionist movements in Spain, Romania, etc. and undermine the sovereignty of current members. As I understand it, he has refused, quite correctly, to receive Sturgeon.

It follows that Scotland will need to become independent first before it can join the EU. But just as an independent Scotland would need to start aligning itself with EU practice in areas such as currency and deficits if it is to join, so a Scotland moving towards independence needs to start aligning itself with the necessary post-independence world.

It is inconceivable that that the EU would admit a country, even with associate status, that deliberately used sterling as its currency. So, bye bye sterling, and probably the sterling peg and welcome the independently-floating Scottish poond. Then start thinking about the deficit. The Barnett money goes overnight. An independently-floating currency in a country whose deficit is as large as Scotland's will be hammered. Painful though it is to say, Scotland has a great deal in common with Greece when it comes to spending money you haven't got. So start getting those austerity work-outs going, and shedding that flab!

Once the new Scottish currency kicks in, you can say goodbye to much of the financial sector in Edinburgh. Any company would immediately locate its rUK business to rUK. (Why bother with exchange rate risk?) It doesn't just apply to the finance sector either. And anyone in Scotland who doesn't think there would be a hard border between Scotland and rUK is dreaming.

Sadly for Scotland, it is physically in the wrong place. Since I don't see that changing, I think the best solution is to stay stuck with rUK and learn to enjoy life. It still has a lot to offer if you ignore politics.

Well, that didn't take long. Spain has strenuously rejected any arrangement by which Scotland is given direct negotiating rights with the EU ahead of any Brexit. Scotland must wait until Brexit occurs, if it ever does, and then apply to enter. It will need the unanimous support of the 27 EU nations to gain entry, and that may not be forthcoming.

In my previous post, I omitted to mention the absence of Thatcher's opt-outs, so beloved of Alex Salmond, if Scotland does apply for EU membership. This means that Scotland's contribution to any EU budget will be about £30 million a week, or £1.5 billion a year, not the smaller sum that an opt-out would have given. A billion here and a billion there and soon your talking big money.

I also omitted to mention the enormous impact on the Scottish universities if Barnett is deliberately abandoned. Running four universities with substantial world rankings on the kind of gruel that getting the Scottish deficit under control will entail will, I predict, be impossible. You might save Edinburgh at that level, but Edinburgh and Glasgow would be a push. The others will largely be done for.

But look on the bright side. Until the UK Government signs the Article 50 letter, the UK is legally a member of the EU. David Allen Green (no relation) thinks it may never be sent. Years of limbo await. Absolutely no need for the SNP to rush to a second referendum.

I have posted up my views on Brexit but it is too long to quote here but I point out in the article that other countries in the EU also have similar issues and have quoted some recent comments from them. I feel that we are now seeing the start of the break up of the EU which frankly is past its sell by date.

I have also highlighted possible ways forward for the UK and Scotland and in my view Scotland should play a positive role within the UK to ensure the UK and Scotland have a bright future.

In particular I have mentioned the Commonwealth with some 2.3 billion people as a great way forward for the UK in trade terms. We all speak English and already have a good relationship. Now we're out of the EU trade between us should flourish.

I conclude by saying that a second Scottish referendum is not only bad for Scotland but in my view Scotland need to step up to the plate and actively work with the rUK to ensure future prosperity for all of us.

You can read my article at http://www.electricscotland.com/independence/brexit2.htm

Kevin, I am sure I was not the only one who thought you deserved a well-earned respite after your sterling efforts in the Scottish independence referendum debate. Unfortunately, the current position for Scotland is even more dire than 2014. And like Cincinnatus, you may need to be recalled from your plough.

Let me explain. The most dangerous factors in recent Scottish politics have their origin in the brilliantly-successful SNP playbook. Constantly work on the neuralgia of grievance, in this case against Westminster, and make up a ridiculous economic story about the rosy future of Scotland after independence. Decry any attempt at rational economic debate as "Project Fear". Not to put too fine a point on it, a campaign built on spewing bile and economic rubbish.

Fast forward to the EU referendum, and what was it built on? A Brexit campaign built on the SNP/Sturgeon/Salmond playbook. A neuralgic sense of grievance against the EU, even in communities in receipt of EU cash, whipped up on the basis of nothing. And an economic case for Brexit that is pure pixie dust, just like the SNP case for Scottish independence.

Sadly for Scotland, Sturgeon will likely attempt another independence putsch in the confusion of the post-Brexit crisis, even though the economic case for Scottish independence is weaker. It is the weakness of that case that needs urgently to be brought out.

Finally, before Miss Nippy congratulates herself too much on her brilliant appearance on the European stage, I see that Juncker's biased, fawning reception of her has finally broken the camel's back, and more than one British paper is carrying a story about Merkel moving to get rid of Juncker ASAP. Funny old world if Cameron was right about Juncker all along.

You can argue that people that don't vote are just lazy or indeed you can argue that many people just don't care as they can't see any benefits to them either way.

People are generally lazier and dumber these days. Newspaper sales are in decline and people are getting their news from a whole variety of, to them, "trusted" sources.

If I want information on the financial state of Scotland I'll read Kevin's Chokka Blog. If I want general news on Scottish affairs I'll use the Scottish Review as they seem to be the only publication not accepting the SNP dictate on all matters to do with Scotland.

I also no longer accept what any government says. For example the SNP states quite clearly that the EU is our largest Export market (which it is) but they fail to tell you that 70% of those exports are to England alone. That little omitted fact makes a huge difference to ones thinking.

Actual facts can be ascertained by taking the time to examine many of Scotland's and the UK's official statistics albeit in some cases taking hours of research.

The corrective arm of the Stability and Growth Pact (SGP) ensures that Member States of the EU adopt appropriate policy responses to correct excessive deficits by implementing the Excessive Deficit Procedure (EDP).

The EDP operationalises the limits on the budget deficit and public debt given by the thresholds of 3% of deficit to GDP and 60% of debt to GDP not diminishing at a satisfactory pace.

These limits are enshrined in Art. 126 of the Treaty and in Protocol 12 accompanying the Treaty in order to ensure sound public finances necessary for the functioning of the Economic and Monetary Union (EMU).

Scotland's current deficit to GDP is at 9.4%. So to join the EU Scotland would by EU law have to implement policies that would reduce the current deficit to 3%. What's not clear about that?

For a new member to join the EU all 27 EU members must vote for them to join. If even one country does not agree then they simply don't get it. Spain, for their own good reasons, have stated very clearly they would veto Scotland joining the EU or remaining in when the UK left.

So just on those two points alone what makes you think that Scotland would even get into the EU or be allowed to remain?

The other part of the mix is that Marine Le Pen, president of the National Front party in France, who is said to be twice as popular as current French president, Francois Hollande, according to a latest poll.

Miss Le Pen has previously praised David Cameron for pledging to hold a referendum on EU membership and forcing the European Commission to “cede to the demands” of Britain.

The anti-immigration party has vowed to hold a vote just six months after it wins power during the presidential elections next year.

National Front leader Le Pen said Thursday’s historic EU referendum was a clear indication the 28-nation bloc was “decaying”, as she vowed to give her own countrymen the choice should she elected to the Elysee Palace.

She said: “I would vote for Brexit, even if I think that France has a thousand more reasons to leave than the UK.

So we also have the French Presidential elections to look forward to in 2017. And should the French vote to leave where does that leave the EU?

The point I am making here is that all is not well inside the EU but we don't seem to be talking about this. Why not?

Sam: "For all the - I accept - ugly rhetoric from some parts of the campaign (on both sides) the No. 1 stated reason for voting Leave was a desire to defend our parliamentary democracy from the EU system of government."

Surveys. I'd bet a large chunk of the household budget that that was a prompted answer from a list of options, not something people came up with out of their own heads. As a side bet, I suspect that choosing any of the other reasons offered would have made the responder feel like a bigot or a simpleton, and people not unreasonably preferred to choose an answer that made them feel rational and intelligent.

Reason for such cynicism? A. I have managed public surveys in my time, and know what rubbish they can produce and how. And B. I bet not one in a thousand of those surveyed could have given a coherent, let alone accurate, description of "our parliamentary democracy", nor could they have demonstrated the remotest understanding of the "EU system of government", nor could they have explained why one was inherently better and the other inherently worse.

'If we voted to become independent now there can be little doubt that borders would be involved; borders between Scotland and the market where 64% of our exports go.'

You are forgetting about Coulport. You can move the subs carrying Trident from Faslane to elsewhere in the UK but you can't physically move over a dozen custom built reinforced concrete bunkers for storing the warheads, built deep into the hillside on the shore of Loch Long.

A new site would have to be planned and developed elsewhere in the UK. Given the two sites have to be no closer than but at least a mile from each other, with deep water access to the ocean, you would therefore need to develop 2 brand new sites from scratch.

The original sites at Coulport and Faslane took 13 years to develop and were specifically chosen for their strategic locations. Therefore if the UK wished to renew Trident in a post-independent Scotland, they would have to agree a short term lease of Coulport and keep the borders open. I think that would put Scotland in a fairly strong negotiating position.

Drew, I can say with some knowledge that other options do really exist and the ageing facilities in Scotland can be replaced. This won't be cheap, but it is feasible, and there are interim solutions. I therefore would not count on the naked blackmail, that you appear to be advocate, being very effective. Scotland has weaker cards than generally realised and behaviour of this sort could lead to permanently soured relations. Fortunately the Nats will probably never reach their desired nirvana.

Anonymous it isn’t a case of blackmail or driving a hard bargain, it is geopolitics. Which is a lot more complex and unpredictable than domestic issues.

Leaving aside the issue of Coulport and Faslane, there are many other geopolitical factors to consider for the UK if Scotland became independent.

Without Scotland as part of the geography and territorial waters, the UK would lose an immediate claim to the waters making up the GIUK gap which is so important to the Royal Navy for defending the UK at sea from potential threats from the Arctic region and North Atlantic, namely Russia.

It is fair to say Iceland is not a formidable player in international politics. However purely down to its geopolitical position as part of the GIUK gap, the threat of Iceland closing the NATO base at Keflavik during the so-called Cod Wars in the 1970s was enough to force the UK to concede a couple hundred nautical miles of important fishing waters to Iceland.

While this took place during the height of Cold War tensions, I don’t think anyone is in any doubt Russia under Putin now poses a similar threat to Europe.

There are a number of important early warning radar and surveillance systems protecting the UK from the air, that monitors the approaches from the Arctic region and North Atlantic, based in Scotland, including RAF Benbecula, RAF Buchan and RRH Saxa Vord. While the locations change periodically for operational reasons, there has always been a continued air monitoring presence in Scotland.

Finally Scotland hosts an important storage and loading site at DM Glen Douglas storing around 40,000 tons of missiles, depth charges, and conventional shells. This is a former NATO base and one of the largest conventional weapons stores in Europe. The depot covers around 600 acres and contains dozens of magazines built into the glen and hillside.

The base is connected by rail and sea via Loch Long and is used by the Royal Navy to load up and drop off unused munitions before and after major conflicts the UK is involved in. Lorries also transport these weapons all over military bases in the UK.

The Royal Navy, RAF and MOD don’t host these military assets in Scotland out of an act of kindness or because they admire the scenery. The jobs could be moved elsewhere in the UK but the bases themselves were chosen for strategic military reasons.

I don’t think the UK would want to lose access to these assets and that is why I think Scotland would be in a good position to sign agreements and treaties that would be mutually beneficial to both parties in the event of independence.

DrewYou are basing your ideas on a reversion to 1980s-style Cold War scenarios. Trident in the short term could well be based outside the UK. In the longer term there are two viable options. This is not the appropriate forum to discuss them. The costs of a new base are likely to be dealt with in any Anglo-Scots independence treaty and would probably be split between the two countries.

Glen Douglas is a NATO facility, not a purely British one, and it now appears to be the SNP's policy to remain in NATO. It is normal to have supplies based in foreign allied territory - ask the US. Any Scottish attempt to use this for negotiation is likely to incur the severe displeasure of Washington and Berlin. However, you should be aware that there are other munitions storage facilities outside Scotland, some of which are seriously under-used. I am sure the displacement of jobs to south of the border will be welcome locally.

Similarly, Scotland will be expected to maintain radar facilities integrated within the NATO reporting chain at its own cost; this becomes expenditure for Scotland, not a problem for the UK, which will continue to receive data. In any case it is not impossible that the Orkneys and Shetlands may be invited to remain within the UK as dependent territories, much like Jersey and Guernsey, and with similar tax advantages. This, along with former rig platforms converted to carry radars, will offer the UK forward reach.

Much more of an issue is how an independent Scotland will deal with incursions into its airspace, be it hijacked airliners or Russian bombers taking short cuts. The proposed SNP defence budget is most unlikely to allow Typhoons to be operated (the logistic support costs for a very small force being disproportionately high). I think that you might be surprised to realise just how much advanced aircraft cost to maintain. Or do you expect the UK do protect you gratis on the basis of the newly antagonistic relationship implied in you argument? Perhaps you are expecting the USAF to do this for you as a favour? Alternatively, you could always ask that nice Mr Putin to do it for you - anyone but the English?

The GIUK gap is an issue only if you are thinking in terms of the sea lines of communication being interdicted by Russian aircraft and submarines (c.f. 1980s). Since Scotland is remaining in NATO it will have to provided necessary basing during a crisis. There is no need for the UK to keep aircraft or ships forward deployed in the far north and incur extra expenditure in Euros.

The bottom line is that while change will be disruptive and incur costs, none of your arguments will be sufficient to allow Scotland a decisive hand in negotiations on other issues and instead are likely to cost Scotland much more in terms of its reputation as an unfriendly state, whose main concern is to screw as much money out of its neighbour as possible.

I am sure that this just what you need to guarantee that a geopolitically isolated Scotland, almost certainly outside the EU for a number of years, and suffering austerity and economic hardship, will have a 'good' working relationship with its much larger neighbour. If I were you I would think twice before starting to dig this hole because other countries can play the same game much more effectively.

I've read that more than three-quarters of the UK's market is in services. How does leaving the EU's single market for trade and services impact the UK's economy? How much of the UK services market is likely to move to Scotland in the event that Scotland remains in the EU?

I've read that more than three-quarters of the UK's market is in services. How does leaving the EU's single market for trade and services impact the UK's economy? How much of the UK services market is likely to move to Scotland in the event that Scotland remains in the EU?Is the loss of the AAA rating likely to make a difference?Will the devaluation of the pound stimulate growth?

Interesting post, a lot has been said about UK internal trade, and how we'd be doomed with any restrictions going south, ironically often by people who see no issues arising from negotiations with the EU on the UK's future trade deal.

A question I haven't found an answer to is, how much Scottish trade going to England is actually bound for the EU? As far as I can gather a lot of goods we send south are recorded as EU exports only at the port they leave from. More clarity on this would be good.

In addition surely a lot of rUK trade heads north, so if we are in a best interests realpolitik world, indy Scotland trade wouldn't be significantly harmed, even with the EURO as our exit would further diminish the £ to parity with the EURO.

The issues from leaving the EU are far broader than the stories the mainstream media are focusing on, large scale scientific, medical and research programs are being set back today. International study and work are going to be essential skills for the modern economic reality, will this just be reserved for the elites? Even the aviation regulations, so many things are tied to the EU, Scotland needs to diversify away from the UK's reliance on service economics especially in financial services if possible, we could have a more flexible and forward thinking society, I see the economic issues and the lack of versatile thinking in Westminster on renewable for example.

A lot of people are calling for indyref2 now, but that won't happen, your calling for wait and see, that is an inevitability at this stage.

Anonymous - most of your solutions to the points I raised rely on an independent Scotland joining NATO.

However, during the independence referendum opponents of independence argued that Scotland would have to reapply to join NATO, it could take years for an independent Scotland to be accepted into membership and they would have to meet the criteria of spending 2% of GDP on defence. The SNP's plan for expenditure on defence was only 1.7% of GDP so Scotland wouldn't meet the membership requirements.

Kevin, that's my point. There is no way an independent Scotland could afford to spend what the SNP committed to on defence in the White paper, to maintain current levels of defence spending in Scotland.

They couldn't afford to get anywhere near the 2% of GDP required for NATO membership.

That would open up a whole can of worms for UK-US and European strategic defence interests.

Without NATO membership, there would be no automatic cooperation and integration of the various RAF, Navy and MOD installations currently operating on the Scottish mainland and territorial waters, that are part of the wider NATO chain of command in Europe.

The UK would therefore have to find other ways to negotiate with an independent Scotland on how to ensure the security of their new near abroad. Without NATO, separate treaties would have to be agreed and without Scotland as part of NATO, or the UK would have a large unprotected landmass, air space and sea channels on its own door step.

Drew, you seem to be suggesting that Scotland will not join NATO, even though it is SNP official policy to do so (see 'Scotland's Future' 2014). Has Nicola Sturgeon whispered something in confidence to you that has yet to be picked up by the mass media? Do you think that Scottish public opinion will be happy at diplomatic non-alignment and having to rely on England to rescue you if and when it all goes wrong militarily?

It would not take years for an independent Scotland to join NATO (it could be a few months, or even less), provided that there was a willingness to accept NATO's deployment of nuclear weapons and first use strategy. This highlights the confusion or sheer hypocrisy of the befuddled Nationalists. They want UK nuclear weapons out, but apparently are happy to rely on American and French ones to deter aggression. It is clearly a case that nuclear weapons are only acceptable if they are not manufactured in Berkshire and the UK has no control over them. Does this mean that you are therefore completely happy with the First Minister's peculiar position of sheltering under the NATO nuclear umbrella?

As far as the 2% defence spending criteria is concerned, you are indulging in a complete fantasy. Belgium, for example, spent 0.87% of its GDP on defence in 2015 and Spain just 0.88% (see IISS: 'The Military Balance 2016'). So given that you would have us believe that Scotland has a vital geo-strategic position, why do you think NATO would prevent its membership because it was spending under 2%?

The SNP case on defence and nuclear weapons is extremely muddled and poorly thought through. Instead of seeing that this is an easy way to intimidate or blackmail a much larger neighbouring country (your major trading partner, incidentally), you might find it more profitable to muse upon the absolute weakness of the SNP position on this key, but underplayed issue.

I agree with you the SNP's policy towards NATO is muddled and given the narrowness of the result in favour of that new NATO policy at their conference, this split is reflected in the leadership of the SNP and within the membership.

However as you are probably aware, the White paper was written as a document for a political campaign, namely the independence referendum. It is not carved in stone.

The SNP have a long history of policy u-turns (the pro-EU stance being another good example) because they are a single issue party with one objective in mind, Scottish independence. They will come up with any policy which they think will help achieve this objective.

It is therefore very difficult to predict what policies they would actually put in place if they ever achieved their single goal of independence.

Personally I think they would soften their stance on nuclear weapons if the practical realities of independence were ever tested.

The UK Government and the Scottish Government would have to find an amicable deal to resolve the issue with Coulport and Faslane in the short to medium term. This would anger a lot of members and damage the party and lead to either a split or collapse of the party. But if they have achieved their prime objective of independence, then this will no longer be of a concern to them.

You seem to want to argue both ways however.

On the one hand you say Scotland would have very little in the way of bargaining chips and would be an outcast in the international community. Then you say NATO would fast-track Scotland's membership and ignore their own membership criteria to ensure the UK-Europe's security.

You also argue Scotland would be suffering severe austerity but at the same time wealthy enough to maintain most of the existing defence requirements to play a role in NATO.

You can't have it both ways.

You also seem to think the fact the nuclear weapons are based in Scotland and might have to be safely and securely removed from Scotland in a reasonably time frame, once a new site is located and developed elsewhere in the UK, is some sort of blackmail. This is merely stating the facts. All I'm doing is pointing out some of the major security issues to be dealt with for the UK, in the unlikely event of Scottish independence.

By the sheer fluke of geography, topography and global positioning, Scotland's wide open under populated territory and landmass is a major asset to the UK armed forces and not something it will want to give up in a hurry.

As terrible as the terrorism attack in France is to my mind this is only likely to make it more likely that next years Presidential elections go to the National Front. Recent polling in France has shown that Marine Le Pen is twice as popular as the current President. I believe this attack is only likely to make her more popular. Should she win the election she has stated that France will have a referendum within 6 months on whether to leave or remain in the EU. At the moment it is likely to be leave and if that were the case where then would the EU be?

There are other elections later this year in Austria and Hungary and more next year and that is why we need to hold on an Independence referendum until we can see where the EU countries are moving.

Well, I came here looking for "fiscal transfer", after seeing it used a few times in forums for a figure of £15 bn (including one that said from England to Scotland), to see if this blog was its origin. Yours at least is down to £9 bn, though also incorrect.

Saw that convoluted blog entry and paper (you're deflecting to) weeks ago thanks, would take twice as long to pull it apart as it took to write it.

Anyway, back to this: "Scotland currently receives an effective fiscal transfer from the rest of the UK of over £9bn pa".

"Scotland currently receives". How do you know? GERS 2014-15 came out in March 2016, 2015-15 isn't due until March 2017, and we're now into 2016-17!"an effective fiscal transfer". No such thing, there is either a fiscal transfer or there isn't."from the rest of the UK". No, fiscal transfers in the UK happen between central government and devolved governments, or vice versa. There is no mechanism for transfers between devolved governments in the UK, and England doesn't even have one, nor does the rUK."pa". No, there is no regular figure, it can vary from year to year.

On top of that, there is no official published figure I could find for any year for the "fiscal transfer". But the UK Government in its anti-independence white paper - an equivalent of part of the Scottish Government's pro-Independence White paper - both with a corresponding bias - has this:

"Fiscal transfers are automatic across the UK, which supports higher welfare and pensions spending in Scotland". (across the UK - also technically inaccurate, nevermind).

Take a look via PESA at 2014 for instance and you get UK pensions + Welfare = £256 billion, Scotland = £22 billion. £22 billion is approximately the same per capita for Scotland as £256 billion for the UK, so according to the UK Gov's definition of "fiscal transfer", the "fiscal transfer" for 2014 was a big fat £0 - either way.

That's why I quite kindly suggested you look up what "fiscal transfer" actually means in the UK.

Come back to me if you find another official definition of "fiscal transfer" that suits your £9 billion figure.

yesindyref2, for the less intelligent among us, can you please explain where Kevin is in error using the phrase "fiscal transfer". You appear to be sure that he is, so it would be good to understand why. Interested by your comment I did look both definition and application up in several places and found one accepted usage to be "transfers between the national and subnational levels of government". Is that not exactly what the annual c£9 billion from the UK to Scotland is? Just curious.

DrewLet me start by congratulating you on your open admission that the independence white paper was just a political document intended to win the referendum, not a serious plan for running a country. This implies of course that you also accept that it was full of untested assertions, half truths and wishful thinking about such minor issues as currency sharing, oil wealth, pensions and EU membership.

You seem uncertain about whether Scotland will seek NATO membership, regardless of what is said to reassure voters. To confuse matters you say that you think the SNP may soften its stance on nuclear weapons if that is the only realistic policy, even though party policy is to remove all nuclear weapons from the country as soon as possible. I am not surprised at these contradictions given the lack of a clear published SNP defence policy. So we now have a contradiction: the SNP is campaigning to get rid of British nuclear weapons, but after independence might be induced to keep them at Faslane after all and possibly join the nuclear NATO alliance.

Just who is trying to have it both ways? Is Scotland going to follow SNP policy and go nuclear free or not? Why would a party fight for independence and then allow Faslane/Coulport to remain, probably leading to their own political meltdown? Is achieving independence all that the SNP wants and what happens thereafter irrelevant?

Fast tracking Scotland's membership would be clearly dependent on accepting NATO strategy, A refusal to do so will see Scotland sidelined, not just by the UK and US, but quite possibly by other NATO members. The agreement of all members is necessary to join NATO. A semi-pacifist government in Scotland will just be an added burden.

Scotland will indeed be suffering from severe austerity after independence, but the cost of running existing radars and keeping a couple of airfields open is fairly low. My estimate as a political economist is that Scotland would in practice be spending on defence at the same rate as Ireland, say £900m-1.1bn p.a.. There is no possibility that they will be able to afford £2.5m given the economic impact of creating a new country. That is enough for some basic paramilitary type forces, a few patrol ships, running the radars, plus a couple of pipe bands, but not much more. Effectively the country will be virtually disarmed.

The only selling point of Scotland is its geographic position, but today it is not absolutely essential. If Scotland joins NATO it cannot deny the UK use of bases, the radar chain, etc. If it stays out of NATO it simply relegates itself to the dark corner of Europe. Bear in mind that it is very possible that there will also a be a delay of several years before EU membership is achieved, despite all Sturgeon's recent groveling and whining. Saying that the UK can retain Faslane, but only at a high price, both political and economic, is clearly a crude form of blackmail. I suspect that the UK may find itself a temporary deterrent home much quicker than you expect, prior to a final relocation.

The bottom line, is that although it will involve time, expense (probably deducted from any financial settlement with Scotland), trouble and inconvenience, the rest of the UK can in a military sense get by without Scotland, as it gets by without Ireland. It is simply naive to think that a rather crude 'we have the geographical position, but you can't use it unless you do exactly what we want' will actually work in negotiations.

It is an established convention to use mot recent published figures as current. As I've shown very clearly the difference in spend per capita and onshore revenue per capita is very consistent over the last 15 years. Given the Barnett formula and fiscal framework we know the difference in spend is continuing; given economic activity and tax rates we know the same is true for onshore revenue. We also know that offshore revenues (oil & gas) is now effectively zero (ie. less than it was in the 2014-15 figures) so we can predict with a very high degree of confidence that we are currently continuing to run close to the £10bn underlying onshore deficit gap that I (and others like the IFS) have identified. I uses £9bn as an ongoing figure to be conservative (there are error bands on the GERS figures and whether its £9bn or £10bn makes little difference to the argument).

As for your cherry-picked pensions figure - well seriously? The whole point about the effective fiscal transfer (the term I consistently use by the way) is it's the net effective of all public spending and all taxes raised. You could also say we net contribute raise more in sin taxes per capita (alcohol, tobacco and betting duties) as I've pointed out elsewhere. So what? It's the total tax and total spend figures you need to look at to work out if we are net recipients of or payers of an effective fiscal transfer.

I'm sorry you were unable to understand these very simple points by reading the detailed paper I've written on the subject. Maybe if you try reading what the IFS have written you will understand it more clearly - they reach very similar conclusions as do the NIESR.

I'm deeply disappointed you feel unable to offer even a few simple examples of where my analysis is wrong - I suggest you start by reading it again and trying to understand the basic principles of how the effective fiscal transfer occurs before making ill-informed and not-even-half-thought-through criticisms

Ah, Kevin, so from your reply, what you actually meant was "onshore deficit gap", not fiscal transfer (though a more accurate term is "cash-terms difference / equivalent"). Why didn't you just say so, could have saved all these column inches! Onshore deficit gap being the gap between the UK deficit as a percentage of GDP, and Scotland's nominal deficit (we don't actually have one) as a % of GDP, with that nominal deficit calculated through GERS, that's the GERS that has for instance "unknown region" revenue incorrectly split between the UK and Scotland (source: scot gov) for, for instance, oil processsed and exported directly from rigs, hence giving a reduced figure for our GDP / revenue.

From the updated IFS report published in March 2016 (which I read at the time), the onshore deficit gap gives a "cash-terms difference" as they call it of -£4.6 bn from GERS 2013-14, -£7.2 bn from the outturns for 2014-15, and a "projected" figure of -£9.4bn for 2015-16, and so on for following years.

But as the IFS says "Since our last projections were made the OBR has revised its forecasts, with the UK deficit now forecast to be a little higher in the period from 2016-17 to 2018-19.", and this was published in March. Since then Osborne has admitted the UK will not actually achieve a surplus as planned because of Brexit, so these figures are already well out of date.

Anyway, although the IFS did call it a "fiscal transfer" in a hasty possibly not properly QA'd update 2 or 3 years ago after Osborne's budget, its current version - correctly - does not use that term.

Incidentally, the deficits of the UK and Scotland - Scotland with or without oil - can be found on the one page executive summary of GERS, and the calculation of the onshore deficit gap (percentage terms) can be done in the head, and then the "cash terms equivalent" with 1 or 2 lines of working. Though this doesn't take account yet of SNAP data. But that would have saved you all that convoluted work. Keep it simple!

The fiscal transfer as described by the UK Government is indeed approximately zero, and relates to spending not previously under control of the Scottish Government (pensions and welfare). Look up the paper yourself, and latest available pensions and welfare figures, split by "region".

The UK has just made a decision (Brexit) that may save/doom the country for the foreseeable future, but that all depends upon who you ask, or, which newspaper/blog you read. So what was Brexit? Was it a good or a bad thing? If so, for whom?

I believe Brexit was a mistake, but I can understand completely why people are disenchanted with an EU that does not appear to listen to its electorate and seems to plough on with its decisions irrespective of what voters think. https://breturn.rocks/

You may be a political economist but you have made a pretty spectacular rookie error. Of course there is no way of telling what the Scottish Government's policy towards nuclear weapons/NATO would be in an independent Scotland. There is no way of knowing which party would win the elections in an independent Scotland or even, which parties would exist post-independence.

The SNP will be delighted to hear you think they would win every single election in an independent Scotland between now and the end of time. But the chances of that happening are highly unlikely. Your analysis so far assumes the SNP would be the only set of policy-makers in an independent Scotland and takes no account of the other political groupings in Scotland. It wasn't that long ago that Labour and the Lib Dems were in control and dominated large parts of the country. Whether these parties would continue in an independent Scotland is open to debate but if they didn't, new political groups and parties would emerge. The Greens have seen a growth in membership and currently can hold the balance of power in the Scottish Parliament. In return for supporting a second referendum, they may insist on a non NATO, nuclear free independent Scotland.

You regard staying outside of NATO as 'the dark corner of Europe' which presumably is what you think of Ireland, Austria and Finland? This doesn't account for the mutual cooperation agreement Partnership for Peace which exists between NATO and non-NATO countries.

Countries like Ireland actually get a 'free-ride' when it comes to security and defence in relation to NATO. As the Republic shares a landmass and border with the UK and could be used as a launchpad for an attack on the UK, there is no way if Ireland was invaded or attacked the UK and NATO could afford the luxury of sitting back and not getting involved in the conflict. It is too close to the UK mainland. The same would apply to Scotland sharing a land border with England and less than 12 miles across the sea from Northern Ireland at the narrowest point. Ireland's policy of neutrality and non-alignment has served them well, largely as a by-stander during World War II and protected during the Cold War. It has also allowed their defence spending, as you mention, to be kept amongst the lowest in the EU.

There are 400,000 people from elsewhere in the UK living and working in Scotland and the Foreign Office would be duty bound to protect their interests post-independence. Overnight they would become the largest British diaspora in the world. Not everyone would be able to sell their house immediately following independence, especially if the economy is going to be suffering. They will in effect be stuck here in the short term. There are also many members of the UK elite society that own land and property in Scotland including Samantha Cameron's father in law, Paul Dacre of the Daily Mail and of course the Queen owns private land and property in Scotland which is exclusive of the Crown Estate. If Scotland's economy suffered to the extent you believe, it is highly unlikely they would be able to sell their assets quickly. So the UK Government would have to ensure their security in the short and medium term. Not to mention the many other millions of pounds worth of assets British businesses own in Scotland.

The reality is, whatever political groupings and parties exist in an independent Scotland, whether inside NATO or outside, nuclear free or retaining the existing military facilities or not, the UK Government would have to cooperate with Scotland on matters of security and defence.

No I didn't mean the onshore deficit gap - I'd say that if I meant that. The point (the staggeringly simple point you appear to be blind to) is that as oil declines the deficit gap and the onshore deficit gap become the same thing (in fact with oil tax revenues being net negative because of decommissioning cost and tax credits the actual deficit gap becomes larger than the onshore deficit gap - but we'll let that pass).

You say "nominal" as if you're making some new point - I wrote an entire page on what GERS does and doesn't mean and was very clear that they are we might call "pro-forma" accounts (a lot better than the term "nominal" which you use by the way, if we're descending into semantic point-scoring). See quote at the foot of this comment.

Its true on a %age GDP basis and per capita basis (which given debt costs are allocated on a per capita basis is arguably a better comparison). Again - I've done both and documented it all very carefully.

You misunderstand the whole point when you refer to the IFS revisions on UK forecasts - the gap is what we're discussing and if anything (look at the macro indicators) Scotland is performing relatively worse than the UK so there is no reason to assume this means the gap is closing - if anything I think we'll find it's widening when the next full figures are released. If you believe the gap is closing, please share with me the evidence for that.

As for the convoluted work - well I have included the SNAP data and taken the analysis back to 1980 and the point of all of this is that yes it is incredibly simple - there has consistently been an onshore deficit gap of £8-10bn over the last decade. The Yes campaign resolutely failed to acknowledge or address this simple fact. Anybody who understands this economic point could not have in good faith argued that "oil is just a bonus" to the economic case for independence.

"Deficit gap", "effective fiscal transfer" [You have continued to ignore my use of the word "effective" I notice], "cash terms difference" - however we choose to label it we can agree that it exists and anybody arguing for independence has to address it.

Imagine how much time you'd have saved if you'd actually read what I wrote as I suggested rather than arguing against a straw man that you've constructed

Here's the link again The Price of Independence - it addresses every single one of your points you've stumblingly attempted to raise, so I know you still haven't read it.

For example here's what I say about interpreting the GERS figures:

Pro-Forma Accounts

We should be very clear about what this analysis of historical fiscal data can and cannot tell us. The figures only tell us how an independent Scotland’s finances would have looked if we had already been independent but were still raising taxes and incurring public spending (including reserved expenditure) as we have been as an integral part of the UK. We are looking at what in financial accounting terms would be considered pro-forma accounts.

The figures do not tell us what the future accounts of an independent Scotland would look like. They do however describe the starting point (the “run-rate”) from where we can start to consider the possible impact and fiscal implications of independence.

See page 26 for analysis using the SNAP figures.

See page 23 for comparative % GDP and per Capita analysis.

See page 5. for painstakingly clearly defined methodology (GERS figures are not deflated, rUK comparisons are not provided)

In reply to Eric (and other fantasy believers)26 June 2016 at 10:44 "The claims made by Leave were Walter Mitty fantasies and to their shame, they were believed by 52% of the UK.I agree with Eric above. Spell out the cost of independence. Don't tell me a tale about unicorns. I may choose to support it next time."===================================================================================But surely you can see the SNP's own plan to leave the UK are based on continuing and ever changing range of "Walter Mitty fantasies" and invented grievance ? The SNP even went to the extent of setting up a pretend "Neutral" yet pro Indy "Business for Scotland" group for the sake of providing "hands off unaccounability" made up walter mitty on the facts of Independence on the Scottish Business to keep them arms length from the official YES campaign. If you think that a political party like the SNP and its false propaganda spouting MP's , MSP's and rabid Activists will ever tell you the honest truth about anything then you are kidding yourself.

The YES campaign (including the SNP) whole purpose is to create a Butterfly and Unicorn max filled environment Utopian dream , the hard reality of which you will never ever be able to understand till you have it and when you have it the largely stable situation that you have now will be completely gone in exactly the same way as pre-brexit UK. The situation will be much worse though with the EU only being circa 14% of Scottish trade but the UK being circa 65% of Scottish trade. The upheaval and distress caused to Scots will be of a different magnitude that Brexit , the loss of £9bn from WM will need to be addressed and that is a completely huge Austerity programme compared with WM's approx mere £3bn Austerity in Scotland so far and the SNP are working hard to sucker Scots into it just like the LEAVE campaign did with Brexit. The Scots nation will realise it has been made mugs off too late when the SNP have their turn at saying "Democracy HAS spoken and must be served and begins steering Scotland like Lemmings into an economic hell only ever previously seen through the Nationalist's deep Rose tinted spectacles where everything you dream off only ever turns out the way you want it to. This is not reality that the SNP are spinning to the Nation, when SNP MP's spend their valuable time writing fictional grievance blogs of childish bile purely for the consumption of Nationalist sympathiser's alone rather than actually doing anything real to make Scotland a better place we should all be worried. Goebbels travelled that path and see how that turned out ? Yet this practice is now widespread within Nationalism.Search Kevins Blog for "Business for Scotland" and see the propaganda for the rubbish it is and ask yourself why the SNP feels it has to deliberately deceive the Nation ? Wake up Scotland and see the propaganda and lies for what they are before its too late or you will have bigger worries than Brexit to deal with.

Drew, I certainly do not suppose that the SNP will win every future election, but it is not unreasonable to suppose that they will win any election that follows closely upon a Scexit vote from the UK. The party is not going to disband itself - there are too many professional politicians anxious about their own future. Since one of the main aims of independence appears to be the removal of Trident, then one has to ask the logic in voters seeking 'freedom' and then happily agreeing to a UK lease or enclave continuing. Regardless of who comes to power Trident will probably go, not least because a British government is unlikely to want to maintain its nuclear base in foreign territory. My original point was that assuming it can be used as leverage for other issues is ill-founded. You are of course quite right that for geographical reasons the UK cannot simply ignore Scotland. This is what will enable a cynical Scots government to seek a free ride on the British taxpayer. I am sure the canniness in saving money will make you proud. The real issues are:

1. Will an independent Scotland join NATO? You have expressed some doubts and you may be right. If it joins NATO then the issues about use of bases, radars, etc largely disappear and so does Scots leverage. If Scotland goes down the Irish non-aligned route then there will clearly be some minor cooperation, but that will probably not extend to areas like providing air defence or intelligence sharing. If Scotland at this juncture finds itself outside the EU as well, perhaps waiting 2-7 years to join, then it will be seriously isolated and very dependent on UK magnanimity (which sadly might be in short supply).

Obviously I do not know the outcome of future elections, but given the apparent influence of the Liberal/Green/left wing Labour/SNP/SCND/peace lobby, I think we have to reckon with the possibility of non-alignment. A refusal to embrace NATO nuclear strategy and unwillingness to spend on defence or allow access to non-nuclear bases, might well lead to reluctance to see the country within the alliance, until its policies change. And of course, a left wing Scottish government may simply decline even to join, actually preferring non-alignment or neutrality instead of resting under the nuclear umbrella.

I doubt that Whitehall will be over-concerned about British passport holders living in Scotland; the real interest is defence of the UK homeland. When I lived in Greece I did not expect the UK to defend me against regional threats - this was a task for the Hellenic armed forces. Or is this yet another example of the unwillingness of too many Scots to let go of nanny's apron strings by pleading the 'suddenly we are all British card'?

2. Will Scotland join the EU? I suppose the answer must be 'very probably', but it may take longer and cost more than appreciated. EU membership outside NATO (like Austria, Ireland, Sweden) might work, since it would be based on the belief the Swedes have, that in the event of a threat the other EU countries would rally round and offer assistance. This is quite possible, although of course it still ultimately rests upon the idea that a nuclear-armed partner (France) would offer the ultimate security. I take it that you think this is more acceptable than London offering the same unwritten guarantee? You might well argue that with Faslane gone there would be no direct NBC threats to Scotland anyway, and at the moment it would be hard to disagree. The whole point about a deterrent is that it is an insurance policy against unforeseen future events. In practice, the fact that you have a nuclear-armed country next door will inevitably draw you into a future nuclear crisis, whether you wish to be or not. Unfortunately, a Scots government is unlikely to have any real say in the London decision-making process.

The point I am trying to make is that your rather over-simplified original argument, that Scotland has lots of defence leverage, is probably much less accurate than you think and there could be undesired consequences.

You were quoting me there, Anon. I was aware that the previous case for independence was filled with fantasy. I was simply pleading that an honest case for independence was presented if there was to be another referendum. I may choose to vote for such a case, though it is unlikely. Funnily enough, George Kerevan on Monday admitted that there would have to be serious spending cuts if Scotland were to become independent. This represents a good start. If a plausible case can be made that Scotland will emerge stronger after the pain, then great. That said, after years of punishing cuts, and the raised poverty, unemployment, suicides and emigration it entails, I don't think it would be worth it.

Greece is completely separate from the UK and thousands of miles away, with far less economic ties and strategic importance to the UK, so your example about British nationals living there isn't the same comparison. If Greece was threatened then it would not be an immediate threat to the UK territory. However, given how close the British base in Cyprus is and the fact Greece is a NATO member, depending on the nature of the threat and aggressor, my bet would be the UK would be part of some kind of intervention anyway, as part of a coalition. But a regional conflict in Greece would not be an immediate threat to the UK, perhaps a concern.

Put it this way, if Scotland is so poor economically and offers little in the way of strategic benefit to the UK, why is the UK Government so determined to keep Scotland in the UK? Following your logic it seems like a waste of time, money and effort to me.

Surely, if you are correct, the financial benefits to the UK of getting rid of Scotland would far outweigh the costs of continuing with the Union?

Think of how many defence jobs could be brought to other parts of the UK to boost employment? The £3.5 billion pounds currently spent on defence in Scotland could be reallocated to other parts of the UK. Not to mention the £15 billion pound annual fiscal deficit in Scotland they could cut overnight.

So why do most UK politicians, newspapers and most security and defence analysts argue about the importance of keeping the UK together?

So why is it that scotland, a country that, according to the hmrc, is exporting MORE than it is importing, WITH OIL, even with a deficit can somehow not stand on its own two feet as an independent country? Surely you would need access to england's indpendent revenue and expenditure figures to have a proper idea of how stron acotland would be... Remember that this deficit that scotland has is WITHIN the UK... England has a MASSIVE trade deficit and always has done whereas scotland, northern ireland and wales are in the black... Although I agree on alot of your points? Scotland CAN be a successful independent country, it is the lack of comparable information that is not allowing us the full insight into the ficals frameworks of ALL countries, states, regions or whatever in this union... I see all four countries being great independent countries on their own with a BETTER relationship without the "we subsidise you" argument that ALWAYS happens

The other thing we have both overlooked so far is the role of America. Regardless of the outcome of any UK-Scottish negotiations and agreements post-independence it will be the US that will rubber stamp them.

Ultimately as the guardians of European security for the last century, firstly on a unilateral basis and then through permanent command of NATO, Washington will not allow anything to happen in Europe that is not in their own national interest.

The US has already several times, both in public and through diplomatic channels, voiced their strong opposition to Scottish independence. This is because the United Kingdom is their main partner in Europe and the continued existence of the UK serves the US national interest in terms of stability and security in Europe. The UK has for all intents and purposes outsourced many aspects of foreign policy to the US and therefore has to do what is in the US national interest too.

An independent Scotland outside of NATO would not, in my opinion, be in the US national interest. Because the US would no longer initially be able to assert influence on around a third of the British Isles landmass and territory, unless it set up a separate bi-lateral agreement with Scotland. Given that this is the case for Ireland and the US, with similar cultural and economic links, this might not be a major issue. However, what to do with key NATO assets in Scotland would then become part of those negotiations.

Of course, Iceland is geographically important to the US, so it was allowed to join and remains an integral part of NATO despite having very little in the way of official armed forces at all.

But whatever difficult and complex negotiations took place between Scotland and the UK over economic and diplomatic issues, the US would always be the final arbitrator to ensure the security and stability of the region.

In terms of the EU, I don't think Scotland could afford to join as a full member. I think EFTA or EEA membership would be more realistic, on the same lines as Norway or Iceland. The SNP's original policy prior to the new policy on NATO was joining Partnership for Peace, the non-NATO cooperation pact with NATO. This might be enough to calm Washington's nerves and would also allow Scotland to set a realistic timetable to remove the nuclear weapons from Scotland and other NATO and UK military assets. The whole process might take 5-10 years to plan, implement and complete.

As to the observation about knowing Englands's revenue and spending figures - well we effectively have these. We have the total UK, we know Scotland and so we know "rest of UK" as UK minus Scotland and this is what I use for much of my analysis (yes of course it's true that rUK includes Wales and NI),

Can I suggest you read this - I think I explain it all reasonably clearly: Price of Independence" (NB click to the full report if you're genuinely curious)

I thought I might copy you into an email I got from a friend who has had many dealing with the UN and EU over many years and is in favour of Scottish Independence.

We are all just trying to come to terms with election results, but here are a few thoughts of mine, such as they are.

The vote was a huge surprise to most of us. I went to bed thinking that the government would win in the end as they tended to do. But next morning the full result surprised me, as it did many of the Leave group.

Nicola's wish to hold another Independence vote is a bit of bluff on her part. It is too soon and there is little public support for it.

Our fishing industry is finished and has been so for decades. The fleet is seriously diminished, as is the pool of skilled workers, - net makers, boat builders, marine engineers, fish processors etc. Anyway, the SNP has never had any serious interest in supporting the fishery sector. Richard Lochhead who has just resigned has been eagerly stripping the coastal fleets of any rights they had to fish in our inshore waters. Most of our ports are closed to fish landings, and the quotas are held by greedy fish salesmen and local banks. He behaved very badly towards the fish catching sector. His staff followed the extreme green line that treated fish catchers like criminals.

As for joining EFTA, there is little interest in that since our fish industry is now so seriously depleted.

But steel is important, and at last we can set our own tariffs for such imports.

As for the doom and gloom merchants, - their threats and predictions of economic collapse are slowly evaporating. The EU elite are beginning to admit we will probably manage fine on our own.

But hooray! we are now free of the iniquitous EU. On television last night it was interesting to hear EU bureaucrats step back from their former position of threats etc, and now grudgingly admit we can do what we like.

But I must hand it to the voters. After Barack Obama, the big banks, and every major institution tried to tell us there was no hope or way forward but to submit to these financial and economic behemoths and accept their rule over us, - Lo and behold the voters cocked a snoop at them and voted the opposite way. They called their bluff and it appears that the these 'kings' had no clothes at all. And now other EU states are indicating they may well follow suit.

What has astonished me, is how quickly the whole pro-EU house of cards has collapsed. Cameron has resigned, Corbyn is facing a rebellion from his own party and the national press is rejoicing that the people have finally spoken.

I've been watching the BBC program about Brexit and it strikes me we are seeing very little discussion on the EU countries and their attitude to the EU.

I've said in this Blog before that the Commonwealth countries could be a major opportunity for us and India and Australia have already said they would be interested in doing a trade deal with us. Remember that to get a deal with the EU you have to get all 28 countries voting for it. As EU countries all have their own issues this makes getting a deal a real nightmare.

As Britain can now go it alone the opportunities must be huge for us surely?

It's a fact that we are going to continue to trade with the EU. If we decide not to accept free movement what percentage of that trade might be hit? I would suggest much less than we might imagine.

Germany has already noted the potential loss of jobs in Germany if they don't do a deal with Britain.

Whether we like it or not Europe is in decline and Asia is where future growth and investment is going. Brexit frees us up to negotiate directly with them. China has already said it would be interested in doing business with us. The USA is also a market where we could do more business.

Scotland in particular needs the EU but to be frank the EU doesn't need Scotland. All talk of warm feelings to us is just that... talk.

So what I'd like to see is (1) more hard research on the workings of the EU and the attitude of the EU countries to the EU. For example France and Austria seem to be against EU membership so how likely is it that they might vote to leave and what would be the repercussions if they did? (2) more research on the prospects for working with the Commonwealth countries and (3) more research on dealing with countries outside the EU and Commonwealth.

Scotland keeps saying that rUK must respect Scotland's position on Brexit and Trident but I see no mention of Scotland respecting rUK's position. So why should England respect Scotland when Scotland clearly doesn't respect England?

From figures that Keith has produced it would seem that rUK might be billions better off without Scotland. I've always been a bit puzzled as to why England and Wales haven't been more aggressive towards Scotland.

And not forgetting Global organisations that now make more of our laws.

So why aren't see spending more of our media time looking at all this?

The picture is equally gloomy for Scotland, regarding EU trade, as part of the UK.

The likelihood is Spain will potentially veto any EU trade deal that would grant the UK access to the single market, unless the UK agrees joint sovereignty of Gibraltar.

If there were no deal with in two years, the UK would leave the EU on WTO terms, meaning tariffs and customs checks for exporters.

While around 64% of our trade is with the rest of the UK, 50% of the UK's trade is with the EU so we will feel a knock on effect of this to our economy as part of the UK. As well of course we will suffer the impact on our own trade, with around 40% of our overseas exports destined for countries within the European Union estimated at £11.6 billion.